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Purchasing a business credit card can make sense if you have a part-time job or an entrepreneurial venture that allows you to make some money. However, your business may not need to be as “formal” as you think, and in fact almost anything can help you qualify for a credit card for your business.
Maybe you drive for Uber or Lyft on the side and get paid as an independent contractor. Maybe you freelance online or work a few hours a week as a Virtual Assistant (VA). Maybe you make homemade soaps and sell your product on Etsy, or you mow your neighborhood lawn on your days off.
Any of these gigs could lead to the need for a business credit card that allows you to earn rewards while separating personal and business spending. The best business credit cards even offer generous sign-up bonuses, and some offer cardholder benefits that make using them for all business expenses a good idea.
But how does one get approved for a business credit card? It’s easier than you think, but the following tips may help.
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Almost all types of self-employment entitle you to a business credit card.
Almost any money-making activity can be worth a business card, and you don’t need to have any formal business structure. If you are not an LLC or S Corp, you can apply for a business credit card as a sole trader, which is perfectly legal.
In fact, the IRS explains sole proprietorship using the following definition: “A sole proprietor is someone who owns an unincorporated business.”
If you have a formal business structure, you likely have an Employer Identification Number (EIN) that you can use along with your Social Security Number (SSN) on your business card application. On the other hand, if you are a sole proprietor, you can only apply with your SSN.
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Your personal credit rating is often a factor in approving a business credit card.
Next, you should check your credit score. This step is important because card issuers consider your personal balance when approving a business credit card. You do this because you are generally personally liable for the amounts your business charges a card, whether your business is profitable or not.
There are a few places where you can check your credit score for free, although different platforms may show you a different version of your credit score. Some credit cards also offer free credit scores, including FICO scores, as a cardholder perk.
In any case, you’re more likely to be approved for one of the top business credit cards if you have at least a “very good” credit rating, which includes a FICO score of 740 or higher. Individuals with FICO scores in the 670-739 range also have a credit rating that is considered “good” and are therefore more likely to qualify.
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You can earn a variety of rewards, including airline miles, with your business credit card.
Take some time now to think about what type of business card you prefer and what benefits you desire the most. For example, would you like the opportunity to qualify for 0% APR on purchases for a limited time, or would you rather earn rewards? And if you’re looking for rewards for your spending, what kind of rewards do you prefer?
While award cards vary, you’ll typically come across business cards that earn flexible awards, flight or hotel points, or cashback.
When looking to collect travel rewards, Chase’s Ink Business Preferred® credit card is a popular option due to the flexibility of the Chase Ultimate Rewards program. This card also starts with 100,000 points if you spend $15,000 within three months of account opening. There is an annual fee of $95.
On the redemption page, you can use your points for cashback, store credit, gift cards, merchandise, travel through the Chase portal, and 1:1 transfers with Chase airlines and hotel partners. Some of these partners are Southwest Airlines, United Airlines, Hyatt, Marriott and others.
If you want a higher reward rate for all your business expenses, you should also consider American Express’ Blue Business® Plus credit card. This American Express business credit card starts with 15,000 points when you spend $3,000 within three months of opening an account, plus you get 2x points for every dollar spent, up to $50,000 spent per year, with no annual fee (see plans) . and fees).
American Express Membership Rewards points can also be used towards a variety of redemptions such as: B. for purchases, booking of travel through the Amex Travel portal or transfer to airline and hotel partners such as Delta Air Lines, British Airways and others.
In the meantime, if you’re loyal to a particular airline and want travel benefits, consider an airline- or hotel-specific credit card. The rewards you earn aren’t as flexible, but you can often progress toward elite status and earn other travel benefits.
For example, the Delta SkyMiles® Platinum Business Card allows you to earn Medallion Qualifying Miles (MQM) and a Medallion Qualifying Dollar (MQD) waiver for Delta elite status. It also includes an annual companion ticket that you can use on flights within the continental US and free checked baggage on all Delta flights. Right now, the card offers 95,000 bonus Delta SkyMiles after you spend $4,000 in the first three months of opening the account.
Many airlines and hotel groups now offer a variety of different credit card options with different benefits and fees. If you are interested in a Delta card, review all your options before committing to a particular card.
If you’re looking for cashback instead, a card with no annual fee can work. The Ink Business Cash® credit card is worth trying as it earns bonus cashback on many popular business spend:
- 5% cashback: The card is yours at office supply stores and Internet, cable and phone service for up to $25,000 in combined purchases per year.
- 2% cash back: Have the card at gas stations and restaurants for up to $25,000 in combined purchases per year.
- 1% cashback: All other purchases.
New cardholders can earn $900 in bonus cash within three months of account opening after spending $6,000. This card has no annual fee and new cardholders are also entitled to a 0% APR on purchases for 12 months, followed by a variable APR ranging from 17.74% – 23.74%.
Note that if you have an Ink Business Preferred, Chase Sapphire Preferred® card, or Chase Sapphire Reserve®, you can convert cashback earned with this card into Chase Ultimate Rewards points.
Related: There are three top Chase Ink business credit cards, but which one is best for you?
After comparing the best business credit cards to find the right solution, you may be able to apply. Fortunately, you can fill out a business card application just as quickly and easily as you would applying for a personal credit card.
Here is an overview of the information you should collect before clicking the Apply Now button:
- Your name and company name
- your social security number
- An employer identification number (if you have one)
- your address and telephone number
- Annual Income
- Rent or mortgage payment amount
- The type of business you own
- The industry in which your company operates
- Annual Business Income
- Number of employees you have
- years in business
There are great benefits that come with picking up a dedicated business credit card, and they go well beyond the rewards you can earn. A business card lets you track and manage your business expenses in one place, and it can also help you keep separate records to simplify your taxes.
Finally, many business credit cards offer benefits like free employee cards, primary car rental insurance, and purchase protection that can make your card more valuable in the long run.
Click Here for tariffs and fees of the Blue Business Plus card.
Click Here for Delta Business Platinum Amex rates and fees.
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